Fiscal Note - SB 0373 - Changes the Length of Time Between Inspection Dates of In Home Health Agencies
L.R. NO. 1428-02
BILL NO. SCS for SB 373 w/ HCA 1
SUBJECT: Department of Health; Health Care; Nursing and Boarding Homes
TYPE: Original
DATE: April 21, 1997
FISCAL SUMMARY
ESTIMATED NET EFFECT ON STATE FUNDS
FUND AFFECTED FY 1998 FY 1999 FY 2000
General Revenue* $0 UNKNOWN UNKNOWN
Total Estimated
Net Effect on All
State Funds* $0 UNKNOWN UNKNOWN
*Expected to be less than $100,000 annually.
ESTIMATED NET EFFECT ON FEDERAL FUNDS
FUND AFFECTED FY 1998 FY 1999 FY 2000
Medicaid* $0 UNKNOWN UNKNOWN
Total Estimated
Net Effect on All
Federal Funds* $0 UNKNOWN UNKNOWN
*Expected to be less than $100,000 annually.
ESTIMATED NET EFFECT ON LOCAL FUNDS
FUND AFFECTED FY 1998 FY 1999 FY 2000
Local Government $0 $0 $0
FISCAL ANALYSIS
ASSUMPTION
Officials from the Department of Health and the Department of Mental Health
assume this proposal would not fiscally impact their agencies.
The Department of Social Services (DOS) states that requiring long-term care
beds in a hospital that meet the criteria set forth in this proposal to go
through the Certificate of Need (CON) process would result in a cost
avoidance to DOS-Division of Medical Services. DOS states that the proposal
would require the facilities to go through the CON process for all long-term
care licensed by the Department of Health (DOH). DOS assumes this would slow
the rate of growth and limit the number of long-term care beds in hospitals
that would be available. DOS states that it is projected that 57 long-term
beds would not be built each year. DOS states this projection was furnished
by the DOH-Certificate of Need Program. DOS assumes the Medicaid cost
associated with long-term beds in hospitals would be the cost associated for
Medicaid eligibles and the Medicare coinsurance and deductibles for
Medicare/Medicaid (dual) eligibles. DOS assumes an eighteen month CON
review/construction/inspection/licensure period.
Cost Avoidance from Medicaid Eligibles
DOS assumes that Medicaid eligibles who need this type of long-term care are
currently being served. DOS states the cost avoidance would arise from the
difference in the rates from the current hospital provider and the rate for a
new facility (Medicare rate). DOS states the current (FY97) weighted average
inpatient rate is $747.64. DOS states the weighted average rate for a new
facility (Medicare rate) is $764.22. DOS states the difference between the
rates is $16.58.
DOS states the FY94 average utilization for Medicaid eligibles in long-term
care beds in hospitals was .1%. DOS states this translates into .057 new
long-term care beds being utilized by Medicaid only eligibles. DOS assumes
the cost avoidance associated with Medicaid eligibles would be $345 annually
(57 beds x .1% = .057 x $16.58 x 365 days = $345).
Cost Avoidance from Medicare/Medicaid Eligibles
DOS states the number of Medicare/Medicaid eligibles who would utilize this
service is unknown. DOS states the average coinsurance and deductibles paid
per long-term care bed during FY96 was $2,312.26. DOS states the maximum
cost avoidance from Medicare/Medicaid eligibles would occur if all 57 new
beds would be filled by Medicare/Medicaid eligibles. DOS states the cost
avoidance would be $131,799 - $2,312.26 x 57. DOS states the number of
Medicare/Medicaid eligibles who would utilize the service would be less than
57. DOS states that because the number of eligibles who occupy the long-care
cannot be determined the cost avoidance associated with this proposal is
unknown but less than $100,000.
Therefore, DOS assumes the amount of the cost avoidance is unknown but is
expected to be less than $100,000.
Oversight assumes that the annual inspections would be reduced due to the
change from annual to every thirty-six months. The reduction in inspections
would allow staff to redirect efforts to investigate complaints and other
management changes in home health agencies due to provisions of this
proposal.
FISCAL IMPACT - State Government FY 1998 FY 1999 FY 2000
(10 Mo.)
GENERAL REVENUE FUND
Savings-Department of Social Services
Decreased payments for long-term care* $0 UNKNOWN UNKNOWN
ESTIMATED NET EFFECT ON
GENERAL REVENUE FUND* $0 UNKNOWN UNKNOWN
*Expected to be less than $100,000 annually.
FEDERAL FUNDS
Savings-Department of Social Services
Decreased payments for long-term care* $0 UNKNOWN UNKNOWN
ESTIMATED NET EFFECT ON
GENERAL REVENUE FUND* $0 UNKNOWN UNKNOWN
*Expected to be less than $100,000 annually.
FISCAL IMPACT - Local Government FY 1998 FY 1999 FY 2000
(10 Mo.)
$0 $0 $0
FISCAL IMPACT - Small Business
Small businesses would be expected to be fiscally impacted to the extent that
they would incur additional administrative costs due to the requirements of
this proposal.
DESCRIPTION
Survey inspections by the Department of Health would be made upon home health
agencies every 36 months for agencies in business at least that period of
time. The frequency of inspection would be determined by factors such as
complaints received and changes in management, supervision, or ownership.
Annual inspections would be made upon businesses in operation less that 36
consecutive months. Surveys in lieu of the department survey would be
acceptable if comparable in scope and method and conducted at the periodic
rate mentioned above.
This legislation is not federally mandated, would not duplicate any other
program and would not require additional capital improvements or rental
space.
SOURCES OF INFORMATION
Department of Health
Department of Social Services
Department of Mental Health
This Fiscal Note is not an official copy and should not be quoted or cited.